Tech selloff sinks stocks amid stimulus deadlock

A selloff in some of the world’s biggest technology companies weighed heavily on the equity market, dragging down stocks amid dimming prospects for fresh stimulus. The S&P 500 fell by 0.79% to 3,672.82 while Dow Jones was down 105.07 points (0.35%) to 30,068.81.

US relief negotiations drag even as Mnuchin, Pelosi hopeful

Lawmakers working on a compromise pandemic relief plan have yet to resolve a deadlock over a business-liability shield and aid to state and local governments, though House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin expressed optimism that a deal was in reach. “One way or another we will get it done,” Pelosi said. Mnuchin said he is cautiously hopeful that they can get something over the finish line.

Trump set record sanctions use that Biden is likely to keep

The Trump administration has imposed sanctions at a record-shattering pace of about three times a day during the president’s time in office: a slew of measures targeting companies, individuals and even oil tankers tied to Iran, North Korea, China, Venezuela and Russia. President-elect Joe Biden’s team is promising a top-to-bottom review of sanctions operations, but don’t expect a significant slowdown on his watch.

Bank of Canada stands pat on rates amid surge in covid cases

The Bank of Canada stood pat on interest rates and reiterated its commitment to keep them at historic lows to support an economy buffeted by a second wave of Covid-19 cases. Policy makers led by Governor Tiff Macklem held the bank’s overnight rate at 0.25% and reiterated a pledge to keep it there, probably until 2023.

Europe debt write-off would be terrible economics, Carstens says

Bank for International Settlements General Manager Agustin Carstens warned euroarea policy makers not to consider canceling government bonds bought during the pandemic. Carstens, who runs the Basel-based institution after a stint at the helm of Mexico’s central bank, said that experience showed such policies wind up being “catastrophic.”

EU leaders set to approve budget as Poland, Hungary accept deal

Hungary and Poland lifted their veto over a landmark European Union stimulus package in exchange for a delay in a sanctioning process that could strip them of access to the funds. The compromise brokered by Germany will be put to the bloc’s leaders meeting in Brussels, where they’ll likely approve the deal, according to an official familiar with the discussions. An agreement will pave the way for the flow of US$2.2 trillion to the continent’s battered economies.

China’s credit growth shows signs of peaking in November

China’s credit remained robust in November, though growth eased slightly amid the economy’s strong recovery. Aggregate financing was 2.13 trillion yuan (US$326 billion) last month, the People’s Bank of China said, higher than the median forecast of 2.08 trillion yuan. Financial institutions offered 1.43 trillion yuan of new loans in the month, slightly lower than estimates of 1.45 trillion yuan.

Oil wavers as traders weigh US crude rise against vaccine aims

Oil was little changed in the face of the second largest US crude build on record as the market held onto hopes of an upcoming vaccine rollout lifting demand from its pandemic-induced slump. Brent crude for February settlement gained US$0.02 to US$48.86 per barrel.

Source: Affin Hwang Research - 10 Dec 2020